Last week the data released by the Government informed that Industrial output grew at its fastest pace in five years in October.

Output at factories, utilities and mines grew 9.8 per cent on year, its fastest pace since October 2010, compared with a 7.8 per cent expansion forecast by analysts in a Reuter’s poll and sharply higher than an upward revised figure of 3.8 per cent growth in September. If this is true then why would the market trade near its year low? We are seeing a divergent trend now with the economy and the market direction and it really shows how bulls believe these data.

On Friday, Nifty closed near its 52 week low of 7560. In fact the year 2015 has started with a bullish note but at the end of February the momentum fizzled out. Analysts believe that the momentum is lost because of slow paced reforms. Even now the GST bill has not seen the light of the day and no one knows when the GST bill will be passed. The Government has been groping in the dark with reference to the reforms. If it could do it faster then we can expect the market to fly higher.

Most of the stocks (at least 70% of the BSE listed stocks) are trading below their 200 DMA and with the FED decision to hike the interest rate the market may not see any up move in the near future. Once we are clear with the FED rate hike we would have clarity in the market. Right now 7800 seem to be resistance for the Nifty. This week we are closely watching on the FED interest hike and parliament proceedings. It is going to be dull moments towards the end of the year.

Let us check out the market which is in the slippery mode and report to you next week. Meanwhile I request you to follow me at Twitter @stockbabu where I regularly post on certain themes.